Inpex Insurance Ltd, a Bermudian-based captive owned by Japan’s largest oil and gas producer, has had its credit ratings affirmed at “A” (Excellent) by AM Best.

The international ratings agency confirmed the company’s Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Rating of “a” (Excellent), both with a stable outlook.

AM Best cited Inpex Insurance’s “very strong” balance sheet and consistent operating performance. The company’s capitalisation was assessed at the strongest level under Best’s Capital Adequacy Ratio, with low underwriting leverage and a conservative investment portfolio boosting its position.

Although Inpex Insurance plans to gradually return surplus capital to its parent, Inpex Corp, AM Best said the captive is expected to keep enough of a buffer to support its business. Risks linked to its heavy reliance on reinsurance were eased by the quality of its partners, including Bermudian-based energy mutual, Everen, which Inpex joined in 2023.

Inpex Insurance has recorded strong underwriting profits over the past five years, with an average combined ratio of under 40 per cent and return on equity of 6.4 per cent. Despite a dip in premium income last year tied to an LNG project, new ventures are expected to support stable growth.

The captive underwrites energy-related operational and construction risks for its parent group worldwide, covering property damage, third-party liability and operator’s extra expenses.

Inpex, besides being Japan's largest oil and gas explorer, also generates and supplies electricity using a photovoltaic power generation system.

AM Best said ratings could come under pressure if Inpex Insurance’s performance worsens or its parent’s credit profile declines. Upgrades may follow if the captive strengthens its balance sheet while continuing to deliver strong results.